The Grounds significantly expands operative business and resolves a further capital market measure
- Sales revenues increased sevenfold to EUR 4.9 million
- Fixed assets grow by 40%, inventories by 51%
- EBIT of EUR 1.6 million is 13.3% above previous year’s level
- Management Board and Supervisory Board resolve increase in the convertible bond issued in February to finance further growth
Berlin, 29.09.2021 – In the first half-year of 2021, The Grounds Real Estate Development AG (The Grounds / ISIN: DE000A2GSVV5) strongly increased its consolidated sales revenues to EUR 4.9 million (previous year: EUR 0.6 million). The main contribution to this were sales revenues amounting to EUR 3.7 million (previous year: EUR 0.0 million) from individual privatisation and the implementation of project developments. It was also possible to increase rental incomes by 26.7% to EUR 695 thousand (previous year: EUR 548 thousand) by further expansion of the real estate portfolio. Consolidated profits before taxes and interest (EBIT) of EUR 1.6 million were 13.3% above the previous year’s level.
Moreover, the growth path already begun was successfully continued by purchased acquisitions of residential properties amounting to EUR 25 million already made in the surroundings of Berlin in 2021. Two thirds of the purchased residential properties were already economically taken over by the end of June, and contributed significantly to the growth in properties held as financial investments by 40% to EUR 19.6 million and to the increase in inventory assets by 51% to EUR 48.7 million. Jacopo Mingazzini, Management Board Member of The Grounds, says “The new acquisitions already made in the 2021 financial year profit from the high economic dynamism in Berlin’s surroundings, and from the simultaneous low construction activity in Berlin, which cannot even begin to cover the existing demand. Consequently, rents in the surrounding area have been rising for years. This is being further strengthened by the positive economic trend, e.g. resulting from the arrival of the Tesla establishment. We see further upside potential here in the future.”
To take the next growth steps, the Management Board resolved today, with the Supervisory Board’s approval, to increase the EUR 12 million volume of the convertible bond issued in February 2021 by up to a further EUR 4.8 million. The company has already received significant commitments from major investors. The intention is to use the funds for the further expansion of the three core business activities by extending portfolio holding, further expansion of residential property portfolio for privatisation and investments in project developments. Management Board Member Arndt Krienen comments: “We had considerable oversubscription of the issue debut in February, and were able to gain new investors for the business model of The Grounds. Therefore, we are confident of our ability to implement further acquisitions with a successful increase.” The increase of the convertible bond is lead by Quirin Privatbank as Bookrunner.
For the second half-year, The Grounds expects another considerable increase in turnover arising from sales revenues. All the planned projects in individual privatisation have gone into marketing by September 2021. The demand for owner-occupied apartments remains high, and is reflected in the current notarisations and reservations soon after the start of marketing. Therefore, the Management Board confirms the forecast for the current financial year of the achievement of sales revenues of EUR 23 million and a consolidated group EBIT of EUR 6.1 million.
The published semi-annual report is available for download here.
The Grounds Real Estate Development AG
Arndt Krienen/Jacopo Mingazzini, Management Board
Charlottenstrasse 79-80, 10117 Berlin, Germany
Tel.: +49 (0) 30 2021 6866
Fax: +49 (0) 30 2021 6849
Ingo Janssen, Managing Director
Haus der Wirtschaft, Kapstadtring 10
22297 Hamburg, Germany
Tel.: +49 (0) 40 6378 5410
10179 Berlin, Germany
Tel.: +49 (0) 30 284 49 87 62
About The Grounds
The Grounds Group realises housing projects in German metropolitan regions. In addition, The Grounds Group holds a steadily growing residential portfolio as fixed assets. The Grounds Real Estate Development AG is listed in the Düsseldorf Stock Exchange’s OTC segment Primärmarkt (ISIN: DE000A2GSVV5), has its seat in Berlin and an office in Stuttgart.